Artificial intelligence will cause “structural collapse” of law firms by 2030.

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Robots and artificial intelligence (AI) will dominate legal practice within 15 years, perhaps leading to the “structural collapse” of law firms, a report predicting the shape of the legal market has envisaged.

Civilisation 2030: The near future for law firms, by Jomati Consultants, foresees a world in which population growth is actually slowing, with “peak humanity” occurring as early as 2055, and ageing populations bringing a growth in demand for legal work on issues affecting older people.

This could mean more advice needed by healthcare and specialist construction companies on the building and financing of hospitals, and on pension investment businesses, as well as financial and regulatory work around the demographic changes to come; more age-related litigation, IP battles between pharmaceutical companies, and around so-called “geriatric-tech” related IP.

The report’s focus on the future of work contained the most disturbing findings for lawyers. Its main proposition is that AI is already close in 2014. “It is no longer unrealistic to consider that workplace robots and their AI processing systems could reach the point of general production by 2030… after long incubation and experimentation, technology can suddenly race ahead at astonishing speed.”

By this time, ‘bots’ could be doing “low-level knowledge economy work” and soon much more. “Eventually each bot would be able to do the work of a dozen low-level associates. They would not get tired. They would not seek advancement. They would not ask for pay rises. Process legal work would rapidly descend in cost.”

The human part of lawyering would shrink. “To sustain margins a law firm would have to show added value elsewhere, such as in high-level advisory work, effectively using the AI as a production tool that enabled them to retain the loyalty and major work of clients…

“Clients would instead greatly value the human input of the firm’s top partners, especially those that could empathise with the client’s needs and show real understanding and human insight into their problems.”

Jomati pointed out that the managing partners of 2030 are in their 30s today and will embrace the advantages of AI. Alternative business structures (ABSs) in particular will be receptive, it predicted, “as it will greatly suit the type of matters they handle”.

It continued: “With their external investors able to provide significant capital, they will invest in the latest AI when it becomes available and use it to rapidly increase the volume of matters. This increased efficiency will not harm their model, but rather make the shareholders in their narrow equity model extremely wealthy.”

For associate lawyers, the rise of AI will be a disaster: “The number of associates that firms need to hire will be greatly reduced, at least if the intention is to use junior lawyers for billable work rather than primarily to educate and train them ready to become business winners.

“Firms will struggle to overcome this gap in the usual career paths of their lawyers, i.e. firms need to hire young lawyers to become the next client winners, but they will be far less profitable at the start of their careers when knowledge bots take over most work up to [three years’] PQE.”

On the impact of AI on law firms, Jomati concluded: “The economic model of law firms is heading for a structural revolution, some might say a structural collapse. We may have heard a lot about ‘New Law’ and [ABS], but the impact of AI will make such developments pale in comparison.”

Small, specialist advisory firms and those focused on process matters might not be affected by AI, the report predicted, adding: “The firms that will be most affected would be the very large, high-value commercial firms whose associates expect to be given interesting work and many of whom aspire to the status and wealth that equity partnership affords. These fee-earners are also incredibly profitable as they clock up the hours on matters the partners have brought in.”

The report forecast a big rise in the number of cities of over 10m people. Jomati’s top five cities in 2030 for their legal markets were New York, London, Paris, Frankfurt, and Singapore. It anticipated: “Far greater global balance in the largest law firms as they seek to follow clients into developing markets and key megacities and global cities around the world. While some global firms already have more than 50% of their revenues and staff based outside the ‘home nation’, by 2030 this will become standard for nearly all major commercial firms.”


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